A recent investigation by the Ministry of Commerce showed that 86.9 percent of the 84 categories of textile goods in China are oversupplied, demonstrating the urgency for China's textile industry to regroup and upgrade its technology.

In recent years, the investment scale in the textile industry has been expanding. In the first five months this year, investment in this industry jumped 39.7 percent year on year, causing the supply to increase by a large margin, official figures show.

Besides, a series of restrictive measures taken by the United States and the European Union against Chinese textile exports further increased the textile goods supplies in the domestic market.

In the first half of this year, China's textile exports reached 50.35 billion US dollars, up 21 percent year on year, 2.4 percentage points lower than that of the same period in 2004.

In the first half of this year, due to the rapid growth of apparel supply in the Chinese market, the apparel price index dropped 2.1 percentage points year on year to 97.9, according to figures from the Ministry of Commerce.

In the latter half of this year, many uncertainties will continue to affect China's textile exports, according to an analysis by the Ministry of Commerce.

While China and the United States are still holding talks on their textile trade disputes, the US government on Monday accepted an application to impose quotas on five Chinese textile products, including skirts, pajamas, swimming suits, tatting shirts and socks, arousing strong objection from the Chinese government.

Although China and the European Union reached consensus in this regard in June, the export growth rates for some China's textile goods to the European Union will be limited to a certain range until 2008, according to their agreement.

More Chinese textile manufacturers will have to find sales channels in the domestic market instead, analysts said.

Despite the booming of China's textile industry in recent years, the country does not have many name brands of its own. Most textile enterprises, investing little in research and development, earn a small amount of profit through processing.

As the world's largest textile exporter, China should help its textile industry to manufacture more products with high technology levels, little pollution, low-level resource consumption and abundant added value, said Du Yuzhou, president of the China National Federation of Textile Industries.

The China National Federation of Textile Industries is organizing textile enterprises across the country to make joint efforts in research and development concerning usage of new materials, environmental protection technology and information technology, Du said.